FAIRFIELD DAILY REPUBLIC - THE OTHER SIDE

Postal Service is a digital dinosaur
By Kelvin Wade July 08, 2010 4:07PM

I e-filed my federal taxes this year and since e-filing my state taxes would cost $20, I decided to mail them. I printed them out, found an envelope on my desk and addressed it. That's when I realized I didn't have any stamps. Stamps? Who uses stamps anymore?

I vaguely recalled that they were square or rectangular stickers that came in various designs. But it had been so long since I'd mailed something that I didn't even know how much a first-class stamp was anymore. I had to get a few things from Safeway and I asked the cashier if they sold stamps.

'Yes. We only sell them in books.'

I didn't know how many came in a book or how much they were but I bought some.

If you're like me, you do everything online. I bank, shop and pay bills online. It's gotten so bad that I sometimes don't retrieve my snail mail for a couple of days because there's usually nothing important in it.

This new-found reliance on the digital has mortally wounded the U.S. Postal Service. The GAO says the Postal Service's business model isn't viable because it cannot cut costs fast enough to keep up with its shrinking volume. Mail volume was down 12.7 percent for 2009. The Postal Service lost $3.8 billion last fiscal year even with 40,000 job cuts. They anticipate losing $6.5 billion this fiscal year and $7 billion in the next.

The Postal Service has proposed a 2-cent increase on first-class postage from 44 cents to 46 cents. There are other proposed increases in advertising mail, packages and other services.

Before anyone complains, it's amazing we can mail something on a Monday and two or three days later, someone on the East Coast can receive that for only 46 cents. It beats the heck out of the Pony Express.

But a coalition of publishers, retailers, corporations and nonprofits called the Affordable Mail Alliance is fighting the increases, wanting to see the Postal Service cut more.

How did the Postal Service not see this coming? You didn't have to be Nostradamus. Anyone who logged online in the early '90s to CompuServe or AOL and used e-mail could see the threat to mail delivery. In fact, there have always been hoax e-mails about nefarious plans to charge for e-mail. The hoaxers saw the value (and economic harm) of e-mail.

The Postal Service should've been the biggest player on the Internet when it came to e-mail. Whether they got in on being an Internet Service Provider, or integrated online banking services or became the shipping company of record, they should've done something to preserve their business in the digital age.

Tower Records could've been iTunes if they'd been agile enough. Blockbuster, which is cratering, could've been Netflix if they'd thought outside the box. A store such as Best Buy complemented and integrated its website with its brick and mortar stores. Companies that can adapt, survive.

There will always be a need for mail delivery. There's just less of a need. Whether it's more draconian cuts, layoffs and eliminating one or two days of delivery, it's up to the Postal Service to find a business model that's profitable.

It's not going to be easy because the time for innovation was more than a decade ago. Peace.

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Yes, the USPS is a quasi-government entity that is supposed to turn a profit. The problem is the excess capacity. The postal service is simply too large for the amount of mail they handle now.

Right now because of its deficits, taxpayers are picking up the tab for postal operations. The public is just in no mood to bail out or prop up or simply subsidize anything. But having a national mail service is important for the country.

I contend that the internet is its largest problem because of what its done to billing, which was a huge part of revenues. In a month's time I used to write probably a dozen personal letters and postcards in additional to snail mail billing. I've gone from that to not using any stamps in a year. Multiply me by a lot of others banking online, using email and texting and that's a huge amount of revenue gone.

We have to have a mail system and to have one that turns a profit, we're going to have to continue to modernize it and resize it. The problems with the postal service today aren't all that different from the problems of our military. We have a Cold War military facing new world challenges. Aircraft carriers are not great anti-terrorism weapons. We have a postal service that was great at doing what it did but we no longer need it to do what it did. We don't have the volume to support it.